REVPAR FOR U.S extended-stay economy, mid-scale and upscale segments is recovering back to pre-pandemic levels, according to a report from consulting firm
The Highland Group. Total extended-stay hotel occupancy is very close to the first quarter levels reported in 2016 and 2017 but below its peak years since 2015.
“Overall, first quarter extended-stay hotel ADR was the highest ever reported in 2023 and all three segments have more than fully recovered their 2019 nominal ADR
values,” the report said.
In its “2023 First Quarter U.S. Extended-Stay Hotels Report,” Highland said the economy and mid-price extended-stay hotels made considerable gains in RevPAR relative
to corresponding classes of all hotels between 2019 and 2023.
Due to high concentration of rooms in urban markets, upscale extended-stay hotels have seen RevPAR decline slightly relative to all upscale class hotels. However, the
gap is expected to narrow as urban markets make a full recovery, the report noted.
“Rising interest rates and construction costs, as well as tightening loan underwriting, means extended-stay supply growth should be relatively low nationally for two
to three years. Assuming the overall hotel industry does not endure a correction, extended-stay hotels should set more new performance records during the near term at
least,” says Mark Skinner, partner at The Highland Group.